Chapter 13 Day 1-4 - Brief Exercise 132 Cash(difference...

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Brief Exercise 13–2 Cash (difference) .......................................................... 54,600,000 Discount on notes payable ($60,000,000 x 12% x 9 / 12 )... 5,400,000 Notes payable (face amount) .................................... 60,000,000 Interest expense ($60,000,000 x 12% x 3 / 12 ) ................... 1,800,000 Discount on notes payable .................................... 1,800,000
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Brief Exercise 13–4 Cash (difference) .......................................................... 11,190,000 Discount on notes payable ($12,000,000 x 9% x 9 / 12 ) ..... 810,000 Notes payable (face amount) .................................... 12,000,000 Interest expense ........................................................ 810,000 Discount on notes payable ........................................... 810,000 Notes payable (face amount) ........................................ 12,000,000 Cash ....................................................................... 12,000,000 Brief Exercise 13–7 In 2016 Lizzie would recognize $11,500 of revenue ($4,000 + 3,000 + 2,500 + 2,000). In 2017 Lizzie would recognize the remainder of $6,500 ($18,000 – 11,500), either because gift cards were redeemed (the $1,000 in January and the $500 in February) or because they are viewed as expired. Brief Exercise 13–10 Under U.S. GAAP, the debt would be classified as long-term for both completion dates, as what is key is that the refinancing be completed before the financial statements are issued.
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Exercise 13–1 Requirement 1 Cash ................................................................ 16,000,000 Notes payable .............................................. 16,000,000 Requirement 2 Interest expense ($16,000,000 x 12% x 2 / 12 ) ........ 320,000 Interest payable ........................................... 320,000 Requirement 3 Interest expense ($16,000,000 x 12% x 7 / 12 ) ........ 1,120,000 Interest payable (from adjusting entry) ................ 320,000
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